After a stellar run the jobs data disappoints

Well it was bound to happen sooner or later. After a series of months when the labour force data has surprised on the upside January’s numbers have shocked on the downside.

The seasonally adjusted series showed 7,900 jobs lost in the month with a thumping 40,600 reduction in full-time positions. But that apparently terrible number needs to be seen in the context of 103,200 full-time positions created in the preceding three months.

With the Participation Rate remaining unchanged at 65.2 it is therefore no surprise to see the headline Unemployment Rate jump to 6.0% (from 5.8% in Dec). Over the past 12 months jobs growth has averaged 24,900 per month; and over the past 6 months the average has been slightly weaker at 23,900. These are still steady numbers and indicate that the labour market remains fairly robust, despite today’s shocker.

Indeed, if we consider the Trend series we see average employment growth over the past 12 months almost identical to the seasonally adjusted series (+25,200) but January saw 19,800 new positions and the unemployment rate dip to 5.8% from 5.9%. Taken together this release is suggesting a slightly slower pace of jobs growth, but healthy growth nevertheless.

In Queensland the seasonally adjusted data showed 9.600 new jobs (2,700 of them full-time) but the headline Unemployment Rate jumping to 6.4% from 5.9%. The reason for the this apparent paradox was a very sharp increase in the Participation Rate to 66.3 (from 65.8). Only once in the past 3 years have we seen a PR this high in QLD, which would suggest a statistical glitch (perhaps related to a change in the sample groups).

The Trend data in QLD shows employment up 6,700 with the unemployment rate stable at 6.1%. Given that the 12 month average jobs growth on both seasonally adjusted and Trend basis is about 6,000 per month, then we can suggest that the labour market in QLD is continuing to show decent growth. The second chart below makes that recovery very evident with employment growth over the past 11 years finally catching up with the growth of the working population.

Regional jobs data will be released next week at which time we’ll update our Conus Trend series for all the QLD regions.

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